Eat24 Class Action

Case3:15-cv-03228-JSC Document1 Filed07/10/15 Page1 of 12
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Michael L. Schrag (SBN: 185832)

mls@classlawgroup.com
Andre M. Mura (SBN: 298541)
amm@classlawgroup.com
Steve A. Lopez (SBN: 300540)
sal@classlawgroup.com
GIBBS LAW GROUP LLP
One Kaiser Plaza, Ste. 1125
Oakland, CA 94612
Phone: (510) 350-9700
Fax: (510) 350-9701
Attorneys for Plaintiffs
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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
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STEVEN KAY and ESTEBAN POLONSKI,

on behalf of themselves and all others similarly
situated,
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Plaintiffs,
vs.
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YELP INC. and EAT24, LLC,
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CLASS ACTION
COMPLAINT FOR RELIEF AND DEMAND
FOR JURY TRIAL BASED ON:
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Case No. ______________
Defendants.
1. BREACH OF CONTRACT
2. QUANTUM MERUIT/UNJUST
ENRICHMENT
3. TORTIOUS INTERFERENCE WITH
PROSPECTIVE ECONOMIC
ADVANTAGE
4. MONEY HAD AND RECEIVED
5. VIOLATION OF CALIFORNIA
UNFAIR COMPETITION LAW
6. CONVERSION
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CLASS ACTION COMPLAINT AND JURY DEMAND
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Plaintiffs Steven Kay and Esteban Polonski, on behalf of themselves and all others
similarly situated, allege as follows:
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NATURE OF THE CASE

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Defendant Yelp Inc. owns Defendant Eat24, LLC, which operates a food ordering
website and mobile platform that covers about 20,000 restaurants nationwide. Eat24s online
payment system offers customers ordering food for delivery two ways to tip when paying by
credit card, Paypal, or Google Wallet: customers may tip delivery persons in cash upon delivery,
or they may add a tip to the actual amount due. The latter option offers customers the
convenience of an entirely cashless transaction.
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But when a customer chooses to pay a tip through Eat24s online payment system
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rather than in person, the delivery person fails to receive any tip. Defendants collect but do not
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distribute tips to drivers. What is more, Defendants conceal from delivery persons the fact that a
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customer has left them a tip through Eat24s online payment system, even though these tips are
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the sole property of Eat24s delivery persons.
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3.
Plaintiffs Steven Kay and Esteban Polonski, who deliver food ordered through
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Eat24 to customers in San Francisco, bring this class action complaint against Defendants for
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unlawfully collecting, taking, or receiving tips for the delivery of food and other items without
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paying these tips to Plaintiffs and other class members. They seek damages, restitution,
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injunctive and other relief for themselves and similarly situated delivery persons (the Class).
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PARTIES
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4.
Plaintiff Steven Kay is a citizen and resident of Oakland, California.
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Plaintiff Esteban Polonski is a citizen and resident of South San Francisco,
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California.
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Defendant Yelp Inc. is a Delaware corporation with its principal place of business
in San Francisco, California.

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Defendant Eat24, LLC is a Delaware corporation with its principal place of
business in San Bruno, California.
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Unless otherwise alleged, at all relevant times, each Defendant was the agent,
servant, employee, partner, joint venturer, franchisee, parent, subsidiary, and/or alter ego of the
other, and at all times acted within the course and scope of such agency, service, employment,
partnership, joint venture, franchise and/or relationship.
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The acts or omissions of Defendants, as herein described, were performed by
officers, managing agents, directors, employees, and/or agents who were responsible for all
actions alleged herein and who were acting on behalf of Defendants. Defendants had advance
knowledge and notice of the action and conduct of such persons and their actions and conduct
were ratified, authorized, and approved by the managing agents, officers, attorneys, employees,
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agents and/or directors of Defendants.
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JURISDICTION AND VENUE

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This Court has jurisdiction over this action under the Class Action Fairness Act,
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28 U.S.C. 1332(d) because: members of the plaintiff class are citizens of different states than
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Defendants; the aggregated claims of the individual class members exceed the sum value of
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$5,000,000, exclusive of interest and costs; and there are more than 100 putative class
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members.
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This Court has jurisdiction over Defendants because they maintain their
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principal headquarters in California, are registered to conduct business in California, have
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sufficient minimum contacts in California, or otherwise intentionally avail themselves of the
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markets within California, through the promotion, sale, marketing and distribution of their
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products or services in California, to render the exercise of jurisdiction by this Court proper
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and necessary. Moreover, Defendants wrongful conduct (as described below) emanates from
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California.
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Venue is proper in this District under 28 U.S.C. 1391 because Defendants
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reside in this District and a substantial part of the events or omissions giving rise to Plaintiffs
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claims occurred in this District.
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INTRADISTRICT ASSIGNMENT
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Assignment is proper to the San Francisco division of this District under Civil
L.R. 3-2(c)-(d), as a substantial part of the events or omissions which give rise to the claim
occurred in San Francisco County
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FACTUAL ALLEGATIONS
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Yelp owns and operates a social networking website that allows registered users
to rate and review local businesses, and its website allows guests (or unregistered users) to search
for and read reviews of local businesses.
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Yelp also owns and operates Eat24, a food ordering website that allows users to
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order food for local delivery. Eat24 claims to serve over 20,000 restaurants in more than 1,500
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cities throughout the United States. A user may visit Eat24 on its website or mobile platform,
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find a participating restaurant nearby, and order food from its menu for delivery. Eat24
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advertises its service as 100% free. And it promotes itself as not the typical delivery-or-
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takeout experience, because food item selection and payment all occur through its website,
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rather than by telephone.
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To deliver food, Eat24 has partnered with Sidecar Technologies, Inc. and its
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subsidiary, Side.cr LLC d/b/a Sidecar (Sidecar). Sidecar is a transportation network company
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operating in 11 cities in the United States. Among other services, Sidecars drivers deliver food
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ordered through Eat24.
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To place an order for food delivery using Eat24, a customer using its website
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must first select the food items to be delivered and proceed to the checkout screen. When paying
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with a credit card, PayPal, or Google Wallet, the checkout screen includes a highlighted section
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labeled Tip. It allows the customer the option of adding a tip for the driver of 10-25% or
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another amount through the electronic payment system, or to Tip With Cash. The screenshot
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on the following page is an image from the order process at www.eat24hours.com:
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It is customary to tip food delivery service workers. One Sidecar driver who used
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to deliver pizzas received a tip on 95% of his pizza deliveries which caused him to wonder why
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he was not receiving tips for Eat24 deliveries.
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Eat24 has acknowledged that tips left in its electronic payment system are for
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delivery drivers. For example, in response to a February 2015 Tweet by an Eat24 customer
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asking for whom did Eat24 collect tips, Eat24 responded: The tip is for the delivery person. We
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just offer the ability to put it on your card. You can always pay the tip in cash.
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https://twitter.com/zimblyanil/status/567239388761825283. An image of the Twitter exchange
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is below:
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This statement was false, however, because drivers do not actually receive the tips
that Eat24 collects on their behalf. Eat24 also conceals the fact that a customer has tipped a
driver through its website, as the tip total is not included on the delivery invoices that drivers
may see when picking up food to deliver. Many drivers have complained online that they have
not received tips from Eat24 deliveries, but Eat24 continues to collect tips and not pay them to
Plaintiffs and the Class members to whom this money belongs. Defendants collection and
receipt of drivers tips instead provide Defendants monetary and other benefits.
PLAINTIFFS EXPERIENCES
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Plaintiff Steven Kay has been a Sidecar driver since approximately August 2013.
Around May 2015, he began making deliveries, including for Eat24.
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Plaintiff Kay was initially unaware that Eat24 customers placed tips for him and
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other delivery drivers when ordering food through the Eat24 program because Eat24 concealed
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the existence of these tips from him and other drivers.
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Plaintiff Kay has not received any tips that customers have given to Eat24 on his
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Plaintiff Esteban Polonski has been a Sidecar driver since 2014 and began
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delivering food for Eat24 in approximately February 2015.

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Plaintiff Polonski received cash tips on a small percentage of his deliveries, but
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was unaware that Eat24 customers placed tips for him via Eat24s mobile or website platforms
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because Eat24 concealed the existence of these tips from him and other drivers.
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CLASS ACTION ALLEGATIONS
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Plaintiffs bring this action on behalf of themselves and a class of persons initially
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defined as follows:
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All individuals in the United States who provided food delivery services for food delivery
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orders placed through Eat24 but did not receive tips legally owed to them.
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This action has been brought and may properly be maintained on behalf of the
Class proposed above under the criteria of Rule 23 of the Federal Rules of Civil Procedure.
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Numerosity: Members of the class are so numerous that their individual joinder
is impracticable. Upon information and belief, there are hundreds if not thousands of people in
the Class, making joinder of each individual member impracticable. Members of the Class are
easily ascertainable through Defendants records.
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Existence and Predominance of Common Questions: Common questions of
law and fact exist as to all class members and predominate over questions affecting only
individual class members. These common questions include the following:
a. Whether Defendants have collected, taken, or received tips for the delivery of
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food and other items through Eat24s website;

b. Whether Defendants failed to distribute the proceeds of those tips to class
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members;
c. Whether Defendants sought to conceal from class members, in receipts or
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otherwise, the payment of tips on food delivery orders;

d.
Whether Defendants are third-party beneficiaries of an implied-in-fact contract

between Defendants and its customers;
e. Whether Defendants have been unjustly enriched by retaining tips owed to

Plaintiffs, in violation of state common law;
f. Whether Defendants have tortiously interfered with the Classs prospective
economic advantages;
g. Whether Defendants have received money paid as tips which belong to the Class,
and which in equity and good conscience should be paid over to the Class;
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h. Whether Defendants have engaged in unlawful, unfair, or fraudulent business
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practices in violation of California Business and Professions Code sections 17200
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et seq., as alleged in this complaint;
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i. Whether California law applies to the proposed Class; and
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j. Whether Plaintiffs and the other class members are entitled to equitable relief,
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including, but not limited to a preliminary and/or permanent injunction.
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Typicality: Plaintiffs claims are typical of the claims of the class members
because, among other things, Plaintiffs and Class members sustained similar damages as a result
of Defendants uniform wrongful conduct and their legal claims all arise from the same core
practice by Defendants of failing to pay Class members tips that rightfully belong to them.
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Adequacy of Representation:
Plaintiffs are adequate representatives of the
Class because their interests do not conflict with the interests of the members of the Class they
seeks to represent. Plaintiffs have retained counsel competent and experienced in complex class
action litigation, and Plaintiffs intend to prosecute this action vigorously. The interests of
members of the Class will be fairly and adequately protected by Plaintiffs and their counsel.
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Superiority: The class action is superior to other available means for the fair and
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efficient adjudication of this dispute.
The injury suffered by each Class member, while
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meaningful on an individual basis, is not of such magnitude as to make the prosecution of
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individual actions against Defendants economically feasible. Even if Class members themselves
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could afford such individualized litigation, the court system could not. In addition to the burden
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and expense of managing numerous actions arising from Defendants conduct, individualized
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litigation presents a potential for inconsistent or contradictory judgments.
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litigation increases the delay and expense to all parties and the court system presented by the
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legal and factual issues of the case. By contrast, the class action device presents far fewer
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management difficulties and provides the benefits of a single adjudication, economy of scale,
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and comprehensive supervision by a single court.
Individualized
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FIRST CAUSE OF ACTION
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(Breach of Contractthird party beneficiary, Cal. Civ. Code 1559)
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Plaintiffs incorporate by reference and reallege all paragraphs previously alleged
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Plaintiffs, and similarly situated delivery persons, are third-party beneficiaries of
herein.
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an implied-in-fact contract between Defendants and their customers, which pay tips through
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Defendants website for the benefit of Plaintiffs and Class Members.
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35.
Customers and Defendants impliedly agreed that Defendants would collect tips
paid by their customers through Eat24s website for the benefit of Plaintiffs and Class Members.
Defendants indicate through their online payment system that customers may tip delivery
persons in cash upon delivery, or they may add a tip to the actual amount due when paying on
Eat24s website. A reasonable customer would expect that the option of adding a tip through
Eat24s website is an alternative means of tipping drivers.
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Defendants promote their web-based service as preferable to ordering food by
phone because it eliminates the need to make payments over the phone. Eat24 allows customers
to pay for tips in advance using credit cards, rather than in cash upon delivery. Moreover, Eat24
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has publicly stated that tips it collects through its website are for drivers.
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No valid express contract between customers and Eat24 requires otherwise.
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As such, Defendants and their customers intended that Plaintiffs and Class
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Members would benefit from their agreement to collect tips from customers and pay them to
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drivers. Defendants breached this agreement causing damage to Plaintiffs and Class Members.
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SECOND CAUSE OF ACTION
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(Quantum Meruit/Unjust Enrichment/Quasi-Contract)
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Defendants have been unjustly enriched by wrongfully and unjustly retaining tips
owed to Plaintiffs and Class Members, in violation of state common and statutory law.
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herein.
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Plaintiffs and the Class are entitled to restitution for their full share of these tips
under the common law doctrines of quantum meruit, unjust enrichment and quasi-contract.
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THIRD CAUSE OF ACTION
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(Tortious Interference with Prospective Economic Advantage)
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Defendants failure to remit tips paid through its platform constitutes unlawful
herein.
tortious interference with a prospective economic advantage. Defendants conduct disrupts the
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economic relationship between customer and delivery workers, thereby depriving delivery
workers such as Plaintiffs and the Class of tips.
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Defendants failure to remit tips is an independently wrongful act in violation of
California Labor Code Section 351, California statutory and common law, including breach of
contract and quantum meruit/unjust enrichment, and constitutes a misrepresentation.
FOURTH CAUSE OF ACTION
(Money Had And Received)
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As a result of Defendants wrongful conduct, they received tips in certain sums
herein.
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which belong to delivery workers such as Plaintiffs and the Class. Equity and good conscience
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demand that Defendants pay over any such tips in their possession.
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FIFTH CAUSE OF ACTION
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(For unlawful, unfair, and fraudulent business practices under California Business and
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Professions Code 17200, et seq.)
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Defendants acts and practices, as alleged in this Complaint, violate all three
herein.
prongs of the California Unfair Competition Law, Cal. Bus. & Prof. Code 17200, et seq.
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Defendants conduct constitutes an unlawful business practice in that Defendants
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have breached implied contracts with customers for whom drivers are third-party beneficiaries in
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violation of Cal. Civ. Code 1559, have been unjustly enriched, have tortiously interfered with a
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prospective economic advantage, have converted money belonging to Class Members, and have
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violated California Labor Code Section 351.
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Defendants conduct constitutes a fraudulent business practice for the reasons
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above and that Defendants concealed the tips from Plaintiffs and Class Members in a manner
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that is likely to deceive drivers into believing that no tips were left for them.
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51.
Defendants practices are also unfair in violation of the UCL in that the harm to
Plaintiffs and Class members outweigh any benefits of allowing Defendants to collect drivers
tips without paying tips to them. The practices are also unfair as they violate established
California policies described above.
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As a result of Defendants unlawful, unfair, and fraudulent conduct, Plaintiffs and
class members suffered injury-in-fact and lost tips to which they were entitled and which
customers expected them to receive.
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Plaintiffs and Class members are entitled to equitable relief, including restitution
or disgorgement of all tips accruing to Defendants because of their unlawful, unfair and
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fraudulent, and deceptive practices, attorneys fees and costs, declaratory relief, and a permanent
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injunction enjoining Defendants from their unlawful, unfair, fraudulent and deceitful activity.
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SIXTH CAUSE OF ACTION
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(Conversion)
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Plaintiffs and Class Members are the lawful owners of the tips paid to them by
herein.
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Eat24s customers. As a result of Defendants wrongful conduct, which includes their collection
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and receipt of tips paid for Plaintiffs benefit, Defendants have interfered with and converted
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Plaintiffs ownership interest in or right to possess these tips.
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The tips Defendants have misappropriated are in a specific sum capable of
identification.
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Plaintiffs and Class Members have been damaged by Defendants conversion.
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PRAYER FOR RELIEF

WHEREFORE, Plaintiffs, on behalf of themselves and on behalf of the class, pray for
judgment as follows:
a. For an order certifying the proposed class and appointing Plaintiffs and their
counsel to represent the Class;
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b. For an order enjoining Defendants from continuing to engage in unlawful

business practices as alleged herein;
c. For an order declaring that Defendants acts and practices constitute a breach
of contract, unjust enrichment, tortious interference with a prospective
economic advantage, conversion as alleged herein;
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d. For an order awarding Plaintiffs and Class members actual, statutory and/or
punitive damages to the extent allowable by law;
e. For an order awarding Plaintiffs and Class members restitution, or any other
equitable relief the Court deems proper;
f. For an order awarding Plaintiffs and Class members pre-judgment and postjudgment interest;
g. For an order awarding Plaintiffs and Class members reasonable attorneys fees
and costs of suit, including expert witness fees; and
h. For an order awarding such other and further relief as this Court may deem
just and proper.
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DEMAND FOR JURY TRIAL

Plaintiffs hereby demand a jury trial on all claims so triable.
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DATED: July 10, 2015
Respectfully submitted,
GIBBS LAW GROUP LLP
By:
/s/ Michael L. Schrag
Andre M. Mura
Steve Lopez
One Kaiser Plaza, Suite 1125
Oakland, California 94612
Telephone: (510) 350-9700
Facsimile: (510) 350-9701
mls@classlawgroup.com
amm@classlawgroup.com
sal@classlawgroup.com
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Case3:15-cv-03228-JSC Document1 Filed07/10/15 Page1 of 12

Michael L. Schrag (SBN: 185832)

STEVEN KAY and ESTEBAN POLONSKI,

YELP INC. and EAT24, LLC,

Case No. ______________

CLASS ACTION COMPLAINT AND JURY DEMAND

Case3:15-cv-03228-JSC Document1 Filed07/10/15 Page2 of 12

NATURE OF THE CASE

convenience of an entirely cashless transaction.

the sole property of Eat24s delivery persons.

Plaintiff Steven Kay is a citizen and resident of Oakland, California.

Plaintiff Esteban Polonski is a citizen and resident of South San Francisco,

in San Francisco, California.

Defendant Eat24, LLC is a Delaware corporation with its principal place of

business in San Bruno, California.

Case3:15-cv-03228-JSC Document1 Filed07/10/15 Page3 of 12

partnership, joint venture, franchise and/or relationship.

The acts or omissions of Defendants, as herein described, were performed by

agents and/or directors of Defendants.

JURISDICTION AND VENUE

principal headquarters in California, are registered to conduct business in California, have

sufficient minimum contacts in California, or otherwise intentionally avail themselves of the

Venue is proper in this District under 28 U.S.C. 1391 because Defendants

claims occurred in this District.

Case3:15-cv-03228-JSC Document1 Filed07/10/15 Page4 of 12

occurred in San Francisco County

for and read reviews of local businesses.

rather than by telephone.

ordered through Eat24.

on the following page is an image from the order process at www.eat24hours.com:

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he was not receiving tips for Eat24 deliveries.

https://twitter.com/zimblyanil/status/567239388761825283. An image of the Twitter exchange

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Around May 2015, he began making deliveries, including for Eat24.

the existence of these tips from him and other drivers.

delivering food for Eat24 in approximately February 2015.

CLASS ACTION ALLEGATIONS

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easily ascertainable through Defendants records.

Existence and Predominance of Common Questions: Common questions of

individual class members. These common questions include the following:

food and other items through Eat24s website;

otherwise, the payment of tips on food delivery orders;

Whether Defendants are third-party beneficiaries of an implied-in-fact contract

e. Whether Defendants have been unjustly enriched by retaining tips owed to

h. Whether Defendants have engaged in unlawful, unfair, or fraudulent business

practices in violation of California Business and Professions Code sections 17200

et seq., as alleged in this complaint;

i. Whether California law applies to the proposed Class; and

including, but not limited to a preliminary and/or permanent injunction.

Case3:15-cv-03228-JSC Document1 Filed07/10/15 Page8 of 12

Plaintiffs are adequate representatives of the

efficient adjudication of this dispute.

The injury suffered by each Class member, while

meaningful on an individual basis, is not of such magnitude as to make the prosecution of

litigation presents a potential for inconsistent or contradictory judgments.

and comprehensive supervision by a single court.

FIRST CAUSE OF ACTION

(Breach of Contractthird party beneficiary, Cal. Civ. Code 1559)

Plaintiffs incorporate by reference and reallege all paragraphs previously alleged

Plaintiffs, and similarly situated delivery persons, are third-party beneficiaries of

Defendants website for the benefit of Plaintiffs and Class Members.

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